Australia’s tax office is reportedly requesting personal data and transaction details from approximately 1.2 million cryptocurrency exchange users in an effort to crack down on crypto tax obligations. The Australian Taxation Office (ATO) stated that this information will help identify traders who may have failed to pay taxes on their crypto trades. The ATO is seeking various personal data, including users’ date of birth, social media accounts, and phone numbers, as well as transaction-related details such as wallet addresses, types of coins traded, and bank account details.
Unlike other foreign currencies, cryptocurrencies are considered taxable assets by Australian regulators. This means that traders are required to pay a capital gains tax on any profits made from selling crypto assets. The news of this potential tax collection crackdown comes at a time when crypto investors have seen significant profits. Bitcoin (BTC) has rallied over 44% since the beginning of the year, while Ether (ETH) has risen 32% year-to-date.
The market capitalization of the top altcoins, excluding Bitcoin and Ether, has also increased by over 27% year-to-date, according to TradingView data.
The complex nature of the cryptocurrency space can lead to a lack of awareness when it comes to tax obligations, as highlighted by the ATO’s notice.
Australia is not the only jurisdiction seeking to collect unpaid taxes from digital asset gains. Canada is also conducting over 400 crypto-related audits and investigating hundreds of crypto investors to secure unpaid crypto taxes. In Turkey, the government is expected to introduce crypto-related legislation later this year to establish a legal foundation for crypto taxes. In the United States, regulators are proposing to raise the long-term capital gains tax rate to 44.6% for investors earning over $1 million a year. Additionally, the Biden administration’s Federal Budget proposal includes a 25% tax on unrealized gains for ultra-high-net-worth individuals.
Despite these developments, experts suggest that these measures may not significantly impact the majority of crypto investors.